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Portfolio Risk Calculator India 2026 – Volatility & VaR

Use this free Portfolio Risk Calculator in India to quantify your portfolio volatility, calculate Value at Risk (VaR), and assess your true risk-adjusted performance.

Calculate portfolio volatility, risk metrics, and Value at Risk (VaR).

Asset 1 Weight (%)

Asset 1 Annual Volatility (%)

Asset 2 Weight (%)

Asset 2 Annual Volatility (%)

Correlation (−1 to +1)

Portfolio Value ($)

Currency

Portfolio Volatility (Annual)

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Daily Volatility (1σ)

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VaR (95%, 1 day)

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VaR (99%, 1 day)

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Diversification Benefit

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Weighted Vol (No Div)

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Risk Category

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What is Portfolio Risk?

Portfolio risk (volatility) measures how much returns fluctuate around the average. Unlike a simple weighted average of individual volatilities, portfolio volatility depends on correlations between assets — lower correlation reduces overall risk (diversification benefit).

Formula

σ_portfolio = √(w1²σ1² + w2²σ2² + 2×w1×w2×σ1×σ2×ρ) VaR (95%) = Portfolio × 1.645 × Daily Volatility Daily Vol = Annual Vol / √252

Examples

US — 60% stocks (σ=18%) + 40% bonds (σ=5%), correlation 0.2

Portfolio Vol: 11.2% | vs weighted avg 12.8% | Diversification benefit: 1.6%

UK — 70% FTSE stocks (σ=16%) + 30% gilts (σ=4%), correlation 0.1

Portfolio Vol: 11.4% | VaR 95% 1-day: £10,400 on £1M portfolio

Example — Euro Zone

€100,000: 60% equities (σ=17%), 40% bonds (σ=5%), correlation 0.15. Portfolio volatility: 10.4% | Daily VaR 95%: €658 | Diversification benefit: 2.1%

Why Use This?

Risk management is as important as return optimization. Knowing your portfolio's volatility helps you set realistic expectations, determine if you can stomach drawdowns, and construct portfolios that maximize return per unit of risk (Sharpe Ratio).

What is Value at Risk (VaR)?▾

VaR estimates the maximum loss at a given confidence level over a time period. 95% 1-day VaR = the amount you'd lose on your worst day in 20. If VaR = $5,000 and your portfolio is $100,000, you could lose $5K+ on any given day 5% of the time.

What is a good Sharpe Ratio?▾

Sharpe Ratio = (Return − Risk Free Rate) / Volatility. Above 1.0 is good, above 2.0 is excellent. Most mutual funds have Sharpe Ratios of 0.5–1.0.

How does correlation affect risk?▾

Two perfectly positively correlated assets (ρ=1) have no diversification benefit. Negative correlation (ρ<0) reduces risk below a simple weighted average — this is why bonds traditionally offset stock risk.

💡 Tip: Stocks and bonds have historically had a correlation near 0 to −0.3, providing significant diversification benefits.